(Adds Deutsche Bank league table data rankings, volumes and market share)
By Jonathan Schwarzberg
NEW YORK, Oct 27 (Reuters) - Deutsche Bank has decided to pull back in arranging leveraged lending transactions in the United States, and the results are showing up in the rankings of banks that finance highly indebted companies.
As leveraged loan and high-yield bond volumes jumped over the first three quarters of this year, Deutsche’s share of these growing businesses has eroded.
Leveraged loans hit a record level of US$994bn over the course of the first nine months while high-yield bonds spiked 19% to total US$214bn, according to Thomson Reuters LPC data.
“We chose to reduce our activity in the U.S.-leveraged finance market due to changes in our credit risk appetite,” James von Moltke, Deutsche’s chief financial officer, said Thursday on an earnings conference call according to a transcript.
The bank’s leveraged loan underwriting market share fell to 3.9% during the third quarter, down from 5.63% for the first three quarters of 2017 and from 6.2% in 2016, according to Thomson Reuters LPC data.
For the first nine months of the year, Deutsche was in eighth place overall, with US$55.5bn of leveraged volume on 236 deals.
In 2016, Deutsche came in sixth place in the league tables for leveraged loan underwriting on US$53.0bn of volume and 207 deals.
Deutsche’s drop in the league tables was also reflected in the bank’s fee income.
The bank ranks ninth in terms of fees earned on US leveraged loans so far this year, according to Freeman Consulting Services, based on deal information from Thomson Reuters.
The firm earned US$455m, or 4.2% of the US$10.7bn in total fees year to date. One year ago, Deutsche was in seventh place, earning US$327m for a 4.9% share of the total US$6.6bn in fee income from arranging leveraged loans.
On the high-yield bond side, Deutsche ranked ninth in volume during the first three quarters of 2017 at US$9.8bn on 93 deals and had a market share of 5.1%. This slipped from full-year 2016, when the bank ranked sixth for bonds and had a market share of 6.8%. The bank’s standings in the league tables dropped even as overall volume jumped.
Deutsche declined to provide additional comment through a spokesperson. (Reporting by Jonathan Schwarzberg; Editing By Michelle Sierra and Lynn Adler)